Natural Resources Committee on Nov. 17th, 2022

[Steven Masson, Acting Director General, Strategic Policy and Projects, Federal Economic Development Agency for Southern Ontario]

I could jump in on behalf of FedDev Ontario.

I'd say it's not so much on the assessment side. Through the indirect investments we make in the ecosystem, or eventually directly to a company as well, a lot of our investment portfolio is very much aimed at positioning southern Ontario-based suppliers to compete and thrive in these global value chains.

One investment we did make last year, in partnership with the APMA, was around the Project Arrow, which was building the first made-in-Canada concept vehicle for EVs. It involved over 40 parts suppliers at the outset, and it's 95% Canadian-sourced.

[Randy Hoback, Conservative, Prince Albert, SK]

In that area, you're starting a pilot project right there, and I congratulate you for doing that.

How do you make sure that project now stays in Canada and doesn't get shipped out to the U.S. or somewhere else and get completed and built somewhere else? What is in the rules with regard to your funding mechanism to ensure that the Canadian taxpayers actually receive all the benefits from the work you're doing?

[Steven Masson]

Our contribution agreements are structured in a way where we will monitor very closely the degree to which the suppliers contribute to that overall project. We will work with APMA over time to track the future success stories coming out of that investment and continue to engage more broadly with the supplier community, whether it's on Project Arrow or other future investments, to make sure that we are working alongside them as an investor or as a champion for their capabilities to pursue other contracts and keep that growth anchored here in the region.

[Randy Hoback, Conservative, Prince Albert, SK]

I think you all know where I'm going with this. Canadian taxpayers are spending the money. They want to see a dividend, a return on that investment, and they want to make sure that that return isn't maximized somewhere else after we go through the effort of doing all the hard lifting to get to that point.

Maybe I will leave it there, Mr. Chair, and I will let you move on to the next witness.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

This question is for the Canada Energy Regulator.

Do you have an update on the numbers for Canada's baseload energy?

[Jean-Denis Charlebois]

Indeed. The end-use energy demand is calculated using petajoules. For the most recent actual data point that we have in 2020, the number of petajoules is 11,257, which is actually a bit of a low mark given the 2020 pandemic. Then if we go to 2030, that end-use energy demand is 11,659 petajoules, which is a slight increase, presumably because of the increase from the low point of the pandemic in 2020.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

With the government's announcement that it is planning to get rid of natural gas by 2035, have you done any studies or analysis on what that's going to mean for Canada's baseload energy that is required going forward?

[Jean-Denis Charlebois]

I think the policy you may be referring to might be the phasing out or the net-zero electricity generation system by 2035—would that be correct?—which still may include natural gas as long as it is coupled with carbon capture and storage.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

We're out of time, I guess. Sorry.

[The Chair, Liberal, John Aldag]

I'm sorry to have to cut it off.

We're going to go now to Ms. Lapointe for five minutes.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

My question is for the Atlantic Canada Opportunities Agency since I didn't get a chance to ask questions on my first round.

Can you tell us how your agency is creating opportunities for businesses to innovate and to increase their competitiveness as the investors around the world turn their attention increasingly to Canada?

[Chuck Maillet]

At the ACOA, we work very closely with ecosystem partners, ecosystem players, in terms of helping to lay the groundwork, helping start-up companies and helping build innovation. That's where we use our non-profit or our non-repayable tools. Then, when the company gets to the point where it has a minimum viable product, some market traction, we will follow up with our investments in terms of repayable loans to help them grow.

We use that with a key approach to also try to leverage other funders so that we can manage the risk in terms of borrowing. We do that across all sectors. I know we're talking specifically about natural resources today, but for us, that's about an average of 1,300 projects a year. About 1,000 are business focused. About 300 are focused on the ecosystem areas.

We have metrics that we measure in terms of what the impact is on those, in terms of the sales growth of co-assisted firms compared to non-co-assisted firms and also the survival rate. We're seeing very significant numbers: a survival rate of about 73% for start-ups versus 33% for ones that aren't assisted by the ACOA.

[Viviane LaPointe, Liberal, Sudbury, ON]

I have another question.

We know that the world wants Canada's critical minerals, but that, in and of itself will not secure Canada's success. We know that we need to focus on the supply-chain level.

Could you tell us what you have been doing to support businesses in the supply-chain levels versus just being involved in the extraction of natural resources, and how are we bringing innovation to the sector?

[Chuck Maillet]

Thank you.

Given that the bulk of that industry is in Newfoundland, I'm going to ask my colleague, David Boland, to maybe jump in on critical minerals in Newfoundland and Labrador.

[Dave Boland, Director General, Regional Operations (Newfoundland and Labrador), Atlantic Canada Opportunities Agency]

Thank you, Chuck.

Thank you for the question.

In terms of critical minerals, that is certainly an area of focus for our mining sector in Newfoundland and Labrador, with a particular focus in Labrador. We've seen companies such as Vale and some of the agreements they have in place with Tesla and other international players that are making news.

From an ACOA perspective, we deal with the supply chain, so we work with companies like Search Minerals, who are looking to set up a rare earth minerals operation. We work with them to see how we can ensure that they do so in a very sustainable way, mitigating and limiting their emissions as they try to bring their product to market.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you.

I'd like to provide my colleague, George Chahal, with an opportunity to ask questions.

[George Chahal, Liberal, Calgary Skyview, AB]

Thank you.

I'm going to direct my question towards PrairiesCan, and maybe Ms. Pawluk. On the importance of diversification on the Prairies, I've seen a number of announcements in Saskatchewan, Regina, but also in Calgary. Recently there was one with the Energy Transition Centre in Calgary, but also with the advanced diagnostics centre at the University of Calgary. How important is that and working with local post-secondary institutions, the City of Calgary, to diversify our economy?

[Joanne Pawluk]

We think it's really critical to work with local economic development and other municipal...and other leaders in terms of what their needs are in their communities.

We've had tremendous success by doing that. It's not only setting our priorities. There was a question earlier about where our priorities are set. Some of that is from broader Government of Canada priorities, but we really listen to our communities and people on the ground to help us set our priorities, because they know what's important and where the best potential is for economic diversification.

[George Chahal, Liberal, Calgary Skyview, AB]

Ms. Pawluk, I've also seen a number of community investments. My colleagues across the table talked about returns, but social returns, the impact on communities with pathways or playgrounds. I know in Calgary, on Stephen Avenue...working with the indigenous communities on the importance of their culture and heritage.

Can you talk a little bit about community-building?

[Joanne Pawluk]

One of the things that is really important to us is inclusive economic development, looking at under-represented groups in the workforce or in business and also at those who face barriers to participation. We look at what we can do, like you mentioned, for indigenous communities, and also for women, people with disabilities, youth, new immigrants and others. That is really important for that full participation in the economy.

[The Chair, Liberal, John Aldag]

We're going to have to stop there and move to our next person, who is Monsieur Simard, for two and a half minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Before I ask my question, I would like to say that I am happy to learn from my colleague Mr. Hoback that Richard Martel is now an aluminum enthusiast. In our region, he is the only elected official who has refused to take part in the aluminum issue table for three years. I therefore reiterate the invitation to him: if he wants to talk about aluminum, he could join us and all the elected officials of Saguenay-Lac-Saint-Jean.

Mr. Charlebois, in the report entitled “Canada's Energy Future 2020—Energy Supply and Demand Projections to 2050,” the Canada Energy Regulator indicates that we must anticipate an intensification of measures to fight climate change, which implies a reduction in demand for fossil fuels.

I would like to know if the regulator has ever done any estimates or studies to see if, over time, the “optimal” use of the Trans Mountain pipeline can be measured. Do we have any idea? Will this infrastructure be good for fifteen or twenty years? Has the Canada Energy Regulator ever done this type of study?

[Jean-Denis Charlebois]

In fact, this question was the subject of the economic feasibility study we conducted in 2016, which measured the use of the pipeline over its lifetime and the tolls that would be paid by shippers.

According to this study, the pipeline would be sustained for 15 to 20 years at 80% of its capacity through long-term contracts. This suggests that these contracts will be used—

[Mario Simard, Bloc, Jonquière, QC]

Forgive me for interrupting.

You just said you did an economic feasibility study in 2013. Did you do anything similar afterwards, when the government wanted to buy the pipeline?

[Jean-Denis Charlebois]

The study was done in 2016 during the evaluation of the expansion project. It has not been redone by the Canada Energy Regulator since the Canadian government purchased the pipeline.

To complete my answer, the remaining 20% of capacity that is not subject to contracts is going to be offered without long-term commitments.